First Quarter 2018 Earnings Review Tom Gentile President and Chief - PowerPoint PPT Presentation

First Quarter 2018 Earnings Review Tom Gentile President and Chief Executive Officer Sanjay Kapoor Executive Vice President and Chief Financial Officer May 2, 2018

First Quarter 2018 Key Announcements  Acquisition of Asco Industries (Asco) ‒ To be completed 2 nd half 2018  Debt refinancing ‒ Lower cost of debt ‒ Extended maturities ‒ Leverage in line with Industry Peers ‒ To be completed in Q2  Capital Deployment ‒ $725M accelerated share repurchase (ASR) (in addition to $75M share repurchases in Q1) ‒ 20% increase in quarterly cash dividend ‒ Return > 100% FCF* for 3 rd year in a row 2 *Non-GAAP measure. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are appended to this document.

Q1 Performance and Recovery Plan Financials YoY Revenue $1.7B +2% EPS $1.10 (6%) Recovery plan  Supplier SWAT FCF* $118M +66% Teams  Additional Training / Coaching Drivers: Supplier Disruption,  End of Line Rate, Model Mix, Higher Quality Dedicated Team → Overtime → Expedited Freight → Surge Resources 3 *Non-GAAP measure. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are appended to this document.

Strategic Summary Vision Innovate in large scale and composite design and manufacturing capabilities to become the leading aerospace structures company How to Compete Where to Compete Execution Requirements Strategic Priorities  Execute Supply Chain Strategy  Strengthen Boeing Relationship  Optimize Mfg. Footprint & Capabilities  Expand Airbus Content  Execute R&D Roadmap  Digitize the Shop Floor  Build 3 rd Party Fab Business  Drive Continuous Cost Improvement  Grow Defense Business  Build & Develop Talent Acquisition of Asco is a compelling fit with strategic objectives 4

Asco Industries Business Overview  Annual revenues of ~$400 million  Recognized leader in high lift devices, large structural parts, and mechanical assemblies  Provides “Design -to- Build” and “Build -to- Print” solutions  Recipient of the 2017 SQIP award for “Best Improver” from Airbus Product Portfolio Programs  Slat support High Lift  Flap support Devices &  Flap beam    A320/A321 B737 ERJ170/175 E1/E2 Mechanisms  Carriages  A330  B787  ERJ190/195 E1/E2  A400M  B777  KC-390  Drag struts   A380 B747  Brackets Structural Parts  Bulkheads & Assemblies  Cross beams F- 35 ‘JSF’  Seat rails   Cseries  G500/550 Interfaces &  Fuselage frames  CRJ 700/900/1000  Crown frames Attachments Many long-term program contracts are life of program  Spars & straps Family owned business based in Belgium since 1954 5

Asco Manufacturing Footprint  Four manufacturing sites located close to key customers  State-of-the-art facilities with size and scale to support build rate increases and future growth North American Footprint European Footprint Vancouver Stillwater, OK Zaventem (HQ) Gedern 715,000 ft 601,800 ft 72,900 ft 113,600 ft 1,400 employees across four sites, comprising over 1.5M sq. ft. 6

Valuation and Timing  $650 million purchase price; post-synergy EBITDA multiple* < 8x  Return on investment exceeds internal company threshold VALUATION  Expected to be accretive to adjusted earnings per share in first full fiscal year  Estimated close in the second half of 2018, upon completion of regulatory TIMING / approvals and other customary closing conditions APPROVALS  Asco will operate as a part of the wing segment within Spirit NEXT STEPS  Detailed integration planning underway to achieve smooth transition 7 *Non-GAAP measure. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are appended to this document.

Debt Structure CURRENT  Debt of $1.1B as of Q1 2018 DEBT  Leverage of ~1.1x STRUCTURE  New debt – $650 million to fund acquisition – $350 million to refinance certain existing bonds and general corporate NEW DEBT purpose STRUCTURE – $725 million ASR (~$425 million of short-term funding to be repaid by year-end)  Pro-forma leverage of ~2.0x by year-end Benefits of new structure  Remain committed to investment grade  Achieve lower cost of debt  Extend debt maturities  Retain balance sheet flexibility 8

Capital deployment  $725 million accelerated share repurchase plan to be executed in Q2 ‒ In addition to $75 million Q1 repurchases ‒ $425 million was remaining buyback planned for 2018 ‒ $300 million incremental repurchase ‒ Return > 100% FCF* for 3rd year in a row  20% increase in quarterly cash dividend  Balance sheet flexibility retained ‒ Organic growth investments ‒ Value-creating acquisitions that fit strategic criteria ‒ Continued return of capital to shareholders through dividend and share repurchases 9 *Non-GAAP measure. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are appended to this document.

Revenue $ millions  Revenue growth 2% y/y  Includes impacts from adoption of ASC 606 $1,736 $1,694  Higher deliveries on 737 and A320  Increased non-recurring and defense-related activity  Lower deliveries on 777 1Q'17 1Q '18  Backlog at $47 billion 10

EPS (fully diluted) $ per share  Down 6% year-over-year $1.17 $1.10  Challenges on rate increase and model mix  Forward loss charge recognized on the 787 program as a result of the pension accounting change 1Q'17 1Q '18 11

Free cash flow* $ millions $118  66% year-over-year improvement $71  Lower advance repayments  Timing in working capital  Continued focus on cash (7-9%) Q1 '17 Q1 '18 12 *Non-GAAP measure. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are appended to this document.

Capital deployment $ millions $800  Repurchased 0.9 million shares in Q1 $650  $0.10 per share quarterly dividend $502  $925 million remaining on current $725 ASR share repurchase program $300  Going forward:  $725 million planned ASR to be $129 executed during Q2 2018 $47  Quarterly dividend of $0.12 * $12 $75 2014 2015 2016 2017 2018 Share Repurchases Cash Dividends *As of Q1 2018 Board Approved ASR and increased existing cash dividend by 20% 13

Fuselage segment $ millions Revenue $963 5%  Preparing for rate increases $917  Includes impacts from adoption of ASC 606  Higher deliveries on A350 and increased defense and non- recurring activity  Lower deliveries on 777 1Q'17 1Q '18 14

Propulsion segment $ millions Revenue (3)% $406 $395  Includes impacts from adoption of ASC 606  Lower deliveries on 777  Higher deliveries on 737 1Q'17 1Q '18 15

Wing segment $ millions Revenue 2% $377 $369  Includes impacts from adoption of ASC 606  Higher deliveries on 737 and A320  Lower deliveries on 777 1Q'17 1Q '18 16

2018 Financial Guidance Reaffirmed May 2, 2018 2018 Revenues $7.1 - $7.2 billion Earnings Per Share (Fully Diluted) $6.25 - $6.50 Effective Tax Rate 21% - 22% Free Cash Flow* $550 - $600 million 17 *Non-GAAP measure. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are appended to this document.

Summary  Execution of recovery plans on track  Asco acquisition consistent with growth framework to enhance position within the industry ‒ Expands Airbus content ‒ Grows defense business, including F-35 exposure ‒ Increases fabrication capabilities ‒ Strengthens supply chain  Debt refinancing ‒ Achieve lower cost of borrowing ‒ Extends maturities ‒ Industry average leverage (~2.0x)  Balanced capital deployment ‒ $725 million ASR ‒ 20% increase in dividend ‒ Return > 100% FCF* for 3 rd year in a row 18 *Non-GAAP measure. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are appended to this document.